CUPA HR Strengthen Leadership Development and Succession Planning Practices

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1 CUPA HR Strengthen Leadership Development and Succession Planning Practices April 11, 2013 Prepared by Consulting Performance, Reward & Talent

2 The Higher Ed Leadership Development Challenge Strength Board and senior leadership support and involvement How can we Get funding for leadership development programs Drive consistent talent review processes Create a culture of open, honest feedback and accountability 1

3 Top Companies for Leaders Research KEY PROCESS STEPS AND REQUIREMENTS: TALENT REVIEWS, HIGH,

4 Leadership System Components Business Strategy Translated into Leadership Capability Needs Pivotal Positions and Profiles Experience Maps and Competency Model Leadership Talent Assessment and Management Individual Leader Assessment and High Potential Identification Talent Review Succession Management Leadership Sourcing Strategy Development Programs Workforce Planning Leader Profiles Development Planning Networking and Exposure Accountability and Follow Through Continuous Improvement: Process, Tools, Decision Making, Role Modeling, Tie to Pay 3

5 Top Companies for Leaders The Foundations for Success Aon Hewitt s research and experience indicates that talent is more successfully managed in organizations where Senior leaders take active ownership of the leadership/people agenda HR priorities are clearly driven by an integrated and embedded business strategy Employee communication is consistently open, honest, and transparent Leaders are measured by outcomes Accountability is driven top-down in meaningful ways Key talent is built by experience, exposure, feedback, and stretch opportunities customized to fit the needs of individuals Talent is more often built than bought (75% internal; 25% external) 4

6 Key Processes at a Glance A B C Talent Review High Potential Identification Accountability and Execution 5

7 A B C Talent Review Talent Review High Potential Identification Accountability and Execution Purpose Have senior leaders discuss, assess, and calibrate key talent within/across the organization using a defined process Collect additional performance feedback on key talent from other leaders Integrate discussion into succession possibilities Top Companies Practices Conduct reviews quarterly or semiannually, at a minimum Be proactive: integrate strategic business planning with talent review efforts Treat high potentials as shared, corporate assets Talent review meetings led by senior managers with HR support/facilitation Succession plans used to fill leadership positions at least 90% of the time Succession readiness is honest and accurate evaluation (not a stretch ) Two to three years after role filled with a successor, organizations will measure effectiveness of successor selection and whether their assessment of that candidate s capabilities was correct Develop an emergency succession plan for top one or two jobs 6

8 Top Companies Embed Future Focus Into Their Succession Plans 100% 80% 100% 100% 100% 100% 78% 81% 72% 84% 96% 75% 60% 40% 20% 0% Assessment of leadership skill gaps Clearly identify w hich jobs/roles are critical to the future success of the organization Preparation of successor lists for select positions Development of high potential (or equivalent) pools of candidates Development of successors for specific positions Source: Aon Hewitt s Global Top Companies for Leaders Study, 2011 Top Companies All Others 7

9 Top Companies Develop Competencies Focused on the Emotional Side of Leadership 100% 100% 100% 88% 92% 100% 100% 96% 80% 79% 79% 74% 76% 67% 60% 40% 20% 0% Manage/lead change Ensure accountability Create a positive w ork environment Help people manage their careers Find and develop next generation talent Encourage netw orks and relationships Source: Aon Hewitt s Global Top Companies for Leaders Study, 2011 Top Companies All Others 8

10 Top Companies Conduct Succession Planning at All Levels of Their Organization 100% 96% 100% 100% 98% 80% 79% 81% 76% 84% 60% 40% 42% 49% 20% 0% CEO Senior management Middle management Front line management Other critical positions Top levels of corporate and business unit executives (e.g., C-suite, EVP, SVP, or equivalent). Managers of other managers (e.g., Vice President, Director, or equivalent). Managers of individual contributors (e.g., Manager, Supervisor, or equivalent). Nonleader jobs/roles that affect customer decision making and have a direct impact on the organization s future growth potential. Source: Aon Hewitt s Global Top Companies for Leaders Study, 2011 Top Companies All Others 9

11 Conducting the Talent Review Process Senior Management Must Haves Current performance data Criteria for measurement of performance Measurement of competencies Collation of performance and potential data HR/Business Head/Reporting Managers Discussion based on performance and potential data Development Plans based on segmentation Talent Review Process Performance Measuring talent on their current responsibilities Potential Measuring talent on their ability to grow and handle responsibilities of greater scale and scope Collation Bringing the two inputs together Discussions Talent Review Discussions Development Focus The follow through Could Haves Past 2 3 years performance data Seeking inputs from skip level manager to bring in various perspectives Measuring values Learning agility Engagement of the team Leadership impact Culture fit with the organization Employee self retrospection their career aspirations 1 on 1 meeting between CEO and the employee Board/CEO involvement/business Managers from different functions Moving from just data to softer nuances Having a flavor of development and opportunities Providing choices in development interventions for employees Rigorous monitoring and tracking of development plans 10

12 A B C High Potential Identification Talent Review High Potential Identification Accountability and Execution Purpose Identify critical talent in the organization to focus development efforts of the organization, track engagement, and prepare replacements for key leadership positions Top Companies Practices Target the high potential pool to be approximately 20% of the Director level and above population Include performance, potential, and character Use performance management scores, 360 degree feedback, assessments, and personal experience as an input Customize assessment mechanisms based on the greatest impact for the individual Ensure business leaders (not HR) identify candidates and calibrate their candidates and definition of potential in talent reviews by establishing consistent mechanisms, frequent check-ins, and meaningful accountabilities 11

13 Top Companies Formally Identify High Potentials Throughout Their Organization 100% 96% 100% 100% 91% 92% 80% 72% 77% 68% 60% 56% 40% 32% 20% 0% Formally identify high potentials (or equivalent) Senior management Middle management Front line management Entry level/early career Levels at which organizations identify high potentials Source: Aon Hewitt s Global Top Companies for Leaders Study, 2011 Top Companies All Others 12

14 Top Companies Use a Variety of Assessments to Identify High Potentials 100% 80% 60% 40% 96% 82% 88% 76% 84% 61% 68% 50% 52% 42% 20% 0% Performance ratings Executive nominations Competency-based assessment HR nominations 360 degree feedback Source: Aon Hewitt s Global Top Companies for Leaders Study, 2011 Top Companies All Others 13

15 Sample 9-Box Formats 14

16 A B C Accountability and Execution High Potential Identification High Potential Identification Accountability and Execution Purpose Monitor success of the process and the outputs Create a discipline in the organization for developing future leaders Top Companies Practices Establish a variety of metrics to hold leaders accountable for developing future leaders Track actions leaders take to develop others using individual Leader Scorecards Collect feedback after talent reviews, trainings, events, etc. to continuously improve Metrics are used to track the strength and diversity of leadership pipelines evaluate the effectiveness of programs and the actions taken by leaders Leaders meet throughout the year to review whether they are taking development actions identified in the talent review process; after initial talent reviews, HR sends a list of to dos discussed in the meetings to leaders Global results for each business units roles up to the Global Leadership Consulate at least once a year 15

17 Top Companies Also Have Formal Metrics Designed to Evaluate the Effectiveness of Critical Programs and Practices 100% 100% 100% 84% 92% 95% 80% 73% 60% 48% 49% 61% 61% 40% 20% 0% Achieving Overall Strategic Leadership Objectives Succession Management Process High Potential Programs Leaddership Development Process Overall Effectiveness in Achieving Growth Objectives in Emerging Markets Source: Aon Hewitt s Global Top Companies for Leaders Study, 2011 Top Companies All Others 16

18 Top Companies Use Outcome-Focused Metrics to Drive Desired Behaviors That Create a Sustainable, Future-Focused Workforce 100% 92% 92% 92% 92% 92% 80% 69% 80% 60% 40% 60% 42% 60% 49% 58% 60% 60% 31% 31% 20% 0% Strength of Leadership Pipeline Diversity in Leadership Pipeline Retention of Leaders Retention of HiPos/Critical Talent # of Diverse Candidates in Successor Pool Ability to Fill Key Positions/ Bench Strength Ability to Resource Growth Initiatives Placement Rate of Diverse Candidates Source: Aon Hewitt s Global Top Companies for Leaders Study, 2011 Top Companies All Others 17

19 Laying the Foundation for Success: What Companies Must Get Right Leaders are engaged and values driven. They demonstrate the right behaviors, right skills, right way. Leadership and talent strategy is closely aligned to and executed against organizational goals. Utilize a consistent and rigorous approach to selection and on boarding. Conduct robust talent reviews, including honest talentmanagement discussions that are facilitated and calibrated consistently. Provide accelerated development through meaningful, experiential, relational, and traditional processes. Maintain a deep and robust talent pipeline via succession management. Define, identify, calibrate and develop high-potential and critical talent. Valid and objective feedback assessments to understand capabilities, guide development, inform succession. Utilize metrics to track progress and drive desired results, differentiated compensation, and rewards. Seamless execution of the fundamentals, with a consistent cadence and rigor. Highlights from Aon Hewitt s Top Companies for Leaders Study

20 Higher Education Leadership Development and Succession Planning KEY PROCESS STEPS AND REQUIREMENTS: TALENT REVIEWS, HIGH,

21 Leadership Development and Succession Planning Is a Critical Priority Most and Least Important Strategic HR Priorities for 2012 Controlling benefits/health care expense Improve leadership development and succession planning 46% 49% Attracting and retaining skilled/professional/academic talent 42% Developing and maintaining faculty and staff engagement 36% Improving faculty and staff diversity 32% Mining workforce analytics to help our institution make fact-based human capital decisions Coordinating talent management practices Providing career advancement opportunities Creating Centers of Excellence (COEs) to manage program strategy and design Reducing workforce turnover 9% 7% 5% 5% 1% 0% 10% 20% 30% 40% 50% 20

22 Key Findings About 10% of respondents have a formal succession planning process at their institution Most institutions look externally to source key talent (e.g., executives, VPs) vs. promotion from within Strong majority of respondents do not believe they have a sufficient talent pipeline to be successful in future Majority of institutions do not have satisfactory metrics to evaluate succession planning/talent effectiveness Several factors impede institutions ability to build a strong leadership pipeline Lack of executive sponsorship Barriers with institutional structures Lack of focus on topic Lack of resources 21

23 Succession Planning Top 10 Factors impeding your institution s ability to build a robust leadership pipeline Factors Percent Institutional structure (e.g., flat, siloed) 56% Lack of resources (e.g., people, time, money) dedicated to succession management practices 47% Lack of executive sponsorship 41% Insufficient succession metrics 41% High-potential employees not developed effectively 38% Not an important priority 35% Geographic constraints (e.g., location, mobility) 27% Mentoring program insufficient to develop leaders 27% Lack of required skills/experience among existing employees 24% Internal training/development programs do not facilitate succession planning 24% Note: Based on 34 responses 22

24 Leadership Program Adoption is Fairly Low Execution of Leadership Development Programs Consistent / Somewhat Consistently Executed Somewhat / Not Consistently Executed Do Not Have This Practice / Don't Know Strong leadership bench with succession plans extending at least 2 3 people down across most leadership roles 8% 28% 65% Include critical manager and director as part of the succession planning process 15% 26% 59% Formal succession management to fill senior leadership positions 11% 32% 58% Rotational assignments to effectively grow leaders and key talent 8% 42% 50% Assessment tools to identify capability strengths and gaps for critical talent 18% 37% 45% Senior leader talent reviews at least once a year 30% 34% 36% Strategic planning process to assess future leadership needs 29% 45% 26% 0% 20% 40% 60% 80% 100% 23

25 Universities Source More Talent Externally than Internally Executive 45% 55% Internal Vice President 42% 58% External Other Critical 50% 50% 24

26 Succession Planning Top 10 elements included in succession planning process Elements Percent Review of executive/vp talent at least once a year 80% Assessment of leadership skill gaps 50% 360 degree feedback 50% Retention risk assessments 50% Diversity goals 40% Third-party assessment 40% Development of high potential (or equivalent) pools of candidates 30% Assessment of potential for advancement 30% Clearly identify which jobs/roles are critical to the future success of the institution 30% Internal successor pools (e.g., high potential) 20% Note: Based on 20 responses 25

27 Case Study Emory Aligned to strategic plan enable Emory s faculty and staff to lead successfully with the right skills to enable success Robust program at multiple levels Excellence Through Leadership Focuses on developing senior leaders Supervisor Development Program (SDP): This program targets nonfaculty supervisory roles. It includes a nine-month curriculum structured around basic fundamentals of supervising people, communication, people skills, ethical behavior, gathering feedback, providing feedback, and other HR policy focus areas. Manager Development Program (MDP): This program focuses on developing managers who demonstrate the capacity to manage large departments or groups. The program consists of 12 classes, 150 hours contact time, and a 360-degree feedback assessment. A capstone project is a component of this program. Excellence Through Leadership (ETL): This program concentrates exclusively on senior leaders reporting to VPs, EVPs, Deans, etc. Each session accommodates 15 people and is administered by faculty from the Business School with particular focus on business acumen for a university setting. The curriculum includes a three-to four-month team project, with each team being assigned an executive coach, and a 360- degree feedback assessment. Academic Leadership Program (ALP): Sponsored by the Provost s office and coordinated through Human Resources, this program is specifically designed for senior faculty positions such as Department Chair, Associate Dean, or Dean, as well as faculty with high leadership potential. The curriculum is developed by the Business School faculty and accommodates up to a dozen faculty members per session. Administrative Professional Program (APP): The purpose of this program is to enhance the capabilities of all executive assistants and other administrative staff. 26

28 Case Study University of Texas System Management Leadership Development Program (MLDP) Aligned of University s strategic plan drive diversity efforts and promote succession planning Designed at 3 levels Senior Leaders Managing for Excellence Mid-Management Advancement in Professionalism Support Management Leading Through Collaboration and Teamwork 27

29 Leadership Development and Succession Planning Action #1 Secure Board and senior leadership commitment Action #2 Define / align consistent talent review and leadership development programs Action #3 Define roles/levels included in succession planning and HiPo ID Action #4 Ensure HR has the skills and systems to support leadership development and talent reviews 28

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